New rules in the Labour Code for the protection of workers

The Labour Code (Law 53/2003) was supplemented by a new case for the suspension of the individual employment contract.

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The Labour Code (Law 53/2003) was supplemented by a new case of suspension of the individual employment contract, which refers to the situation caused by the emergency decree or siege on the territory of Romania.

In particular, the employer will have the possibility to suspend the individual employment contracts of the employees during the temporary suspension of the work and/or its reduction following the decree of the state of siege or emergency pursuant to Article 93(1) of the Romanian Constitution, republished.

This implies that the employer, on its own initiative, without the worker’s consent, will be able to suspend the individual contract of the worker, but only for the time when its use is suspended or reduced and only if this is due to a state of siege or emergency.

What is the impact on employees?

In this case, workers receive from the unemployment insurance budget an allowance of 75 % of the basic salary corresponding to the job, but not more than 75 % of the average gross wage used to base the current state’s social security budget during the maintenance of the siege or emergency conditions.

The compensation will be taxed and compulsory social contributions will be paid, according to the provisions of the Tax Code.

The calculation, maintenance and payment of income tax, state social contributions and health insurance contributions will be made by the employer on the basis of the benefits received from the unemployment insurance budget.

For benefit, income tax is determined without basic function and no insurance contribution is due for work.

What can the employer also do?

If the budget for the payment of staff costs so permits, the employer may supplement the allowance by amounts corresponding to the difference, up to a minimum of 75 % of the basic salary corresponding to the place of employment.

The law allows it, but we believe that it is unlikely that an employer who has suspended the business, therefore has no income, can commit additional amounts to pay the employees.

What do we do in special situations?

The law provides for two situations:

  • where a worker has more than one individual employment contract, of which at least one full-time contract is active during the siege or emergency period. In this case the person will not benefit from the above facility;
  • the second case, when a worker has more than one individual employment contract and all are suspended due to the state of siege or emergency. This time, the person will benefit from unemployment insurance allowance for the individual contract of employment with the most advantageous wage rights.

What are the consequences of the suspension for employees?

The period of suspension referred to in Article 52 (1) (f) shall constitute a period of contribution without payment of the contribution to the sickness insurance scheme for leave and social security benefits in the event of sickness. For the determination and calculation of social security health benefits in this case, the minimum gross basic salary per country guaranteed in payment shall be used, in force during the suspended period.

What will employers do?

Employers will submit by e-mail an application signed and dated by the legal representative to the employment agencies, accompanied by a self-declaration from the employer’s legal representative and a list of persons to be covered, in accordance with the model approved by order of the Minister of Labour and Social Protection.

During the current month, documents are presented for payment of the allowance in the previous month. Payment must be made within 15 days of the submission of the documents and income from employment for employees must be paid within three working days of receipt of these amounts by the employer.

It is clear that this procedure will lead to a whole series of negative consequences for employees as they will receive the money late and will obviously be late in fulfilling other obligations (loans, payments to utilities, etc.).

What are the consequences of this suspension for employers?

Employers shall not be able to abolish the employment of persons whose individual employment contracts have been suspended in accordance with Article 52 (1) (c) or (f) for a period, at least equal to the period of suspension from which they have benefited such workers, the payment of unemployment benefits provided for in the unemployment insurance budget.

Employers may be penalised in the event of failure to comply with this obligation, with the penalty of returning the sums received as compensation for the posts lost.